Uber invests in Chilean fintech Galgo to expand motorcycle financing

Nearly 40% of formal credit extended to families in Latin America comes from fintech companies, according to recent reports. These loans tend to be smaller in amount but carry higher rates of default. This trend highlights the growing role of financial technology in expanding access to credit, particularly among lower-income populations who may lack traditional banking services. The rise of fintech-driven lending has been fueled by the need for more flexible and accessible financial solutions. In particular, microloans and small-scale credit products have gained traction as they cater to individuals and businesses that struggle with conventional loan structures. The increased reliance on fintech platforms reflects broader shifts in how credit is distributed across the region, with digital tools enabling faster approvals and wider reach. One notable example of this expansion is the investment by Uber in the Chile-based fintech company Galgo. Uber has entered into a strategic partnership with Galgo, which specializes in financing the purchase of motorcycles. This collaboration marks a significant step in Uber’s efforts to expand its presence in vehicle financing markets. Galgo, founded eight years ago, has already made strides in Mexico and Colombia, leveraging the high demand for motorcycles in these countries. The investment represents the largest single investor contribution in Galgo's history, according to Sebastian Parot, co-founder and executive director of the company. Through this alliance, Galgo aims to develop a specialized product offering discounted credit exclusively to Uber drivers. This initiative aligns with the growing importance of the gig economy in urban transportation, where motorcycle taxis play a crucial role in navigating congested city streets. According to Parot, motorcycles are a preferred mode of transport for nearly 60% of the population in regions where car ownership is financially out of reach. For many, a motorcycle serves both as a means of income and a practical solution for daily commuting. Galgo’s business model focuses on providing financial tools that empower individuals rather than simply facilitating consumer spending. By enabling people to invest in tools that enhance their earning potential, such as motorcycles, the company positions itself differently from typical consumer finance providers. Sales of motorcycles are growing rapidly across several Latin American countries, with industry associations reporting double-digit growth rates. In addition to its current operations, Galgo plans to enter a fourth Latin American country in early 2027. While the specific location has not been disclosed, the company continues to explore opportunities beyond the region. Galgo has also received support from Bank of America during its partnership with Uber, underscoring the increasing interest from global financial institutions in the fintech space. To date, Galgo has issued over $400 million in credits and became profitable in the past year. The company projects annual revenues of up to $500 million by 2030, significantly surpassing its current figures. The partnership with Uber will further bolster Galgo’s investments in technology, data analytics, and artificial intelligence, enhancing its ability to serve a larger customer base efficiently. Galgo began as a fintech firm called Migrante, initially targeting Venezuelan migrants excluded from traditional lending systems in Chile. Its pivot toward motorcycles came after a financial downturn in 2022, following a surge in venture capital activity across Latin America. At that time, the company had to make difficult decisions, narrowing its focus to motorcycles and expanding into new markets such as Mexico and Colombia. Today, Chile accounts for just 2% of Galgo’s business, though the company intends to maintain its presence in the country. Looking ahead, Galgo expects continued expansion within Latin America and may consider entering international markets alongside Uber. The company is also preparing for another round of funding in 2027, signaling confidence in its long-term strategy and growth prospects.